Bayfront’s New Owner Under SEC Investigation
Fast-growing Health Management Associates has received a subpoena from the Securities and Exchange Commission, the Naples-based hospital company told investors on Thursday.
HMA was already under investigation by the Justice Department, a probe announced last summer that allegedly involved emergency room admissions. Now the SEC wants information on the chain's accounting practices. The agency asked for documents related to Medicare, Medicaid and private insurance, the company said in a news release.
The bad news for the chain follows two major accomplishments last month. On April 1, an HMA subsidiary acquired an 80-percent interest in Bayfront Medical Center and its affiliated operations in St. Petersburg, accompanied by a clinical affiliation with Shands Healthcare and the University of Florida.
And on April 22, as the Ocala Star-Banner reported, the Marion County Hospital District Trustees awarded control of publicly owned Munroe Regional Medical Center in Ocala to a Shands/HMA management group.
HMA owns 71 hospitals in 15 states, including two dozen in Florida.
HMA was planning to host a conference call for Wall Street analysts Friday morning to discuss its first-quarter earnings, which were lower than expected. It was expected that president Gary Newsome will have to field questions about the SEC investigation, as well.
The company took a public-relations blow in December from a critical story on the CBS news magazine "60 Minutes." The show aired physicians' allegations that they had to meet admission quotas.
The subpoena was issued April 25, according to the news release posted on the company web site. The financial statement contained in the release shows a first-quarter net income of $23.1 million on revenue of $1.48 billion, compared with $37.7 million on revenue of $1.69 billion for the same period in 2012.
Inpatient admissions were down 8.8 percent, the company reported, and the percentage of uncompensated care rose to 28.6 percent from 26.1 percent in the first quarter the year before.